NFL's use of Grant Park, pegged at $1 million, cost the league nothing

Chicago Park District waived a $937,500 fee for NFL Draft, according to documents released to Chicago Tribune.

Those who attended the 2015 NFL Draft and outdoor fan festival in downtown Chicago nearly four weeks ago aren't the only ones who got to take advantage of the action for free.

The NFL did too.

After a request from the NFL and tourism booster Choose Chicago, the Chicago Park District waived a $937,500 rental fee to use Grant Park and nearby parkland, according to documents released to the Tribune under a public records request. The district also waived a security deposit.

Historically, the Park District provides relief to nonprofit and charitable organizations hosting events on its property. For example, the district's special event permit application states that nonprofits may receive up to half off rental fees — which can easily reach six-figures for one site — if all of the event's net proceeds go to the nonprofit.

But the application doesn't outline terms for a full nonprofit fee waiver like the NFL received.

However, the NFL's permit application submitted to hold its three-day spectacle never even marked the areas requesting a not-for-profit discount. Just days before the draft started April 30, the NFL, a $10 billion enterprise, announced that it was giving up its federal-tax-exempt status.

Allen Sanderson, an economist at the University of Chicago who studies sports, said the waiver was an example of how sports leagues hold a monopoly with what they sell and wield more leverage when negotiating with public officials.

"That's sort of a staggering figure to me," he said. "It's the NFL exercising its power."

Nevertheless, the NFL Draft and Fan Festival drew big crowds to downtown Chicago. The 126-year-old Auditorium Theatre on Congress Parkway retooled itself to host the draft while the fan festival — considered Mayor Rahm Emanuel's selling point that persuaded NFL Commissioner Roger Goodell to bring it to Chicago — was held across the street in Grant Park.

Costs associated with the draft remain murky because Choose Chicago, the nonprofit tourism agency that organized the event with the league, is not subject to public records laws. Three years ago, Emanuel closed the city's tourism department and transferred duties to the tourism bureau, whose budget now comes mostly from government grants.

The three-day NFL draft and its related fan activities drew 200,000 people, drawing praise from league and city officials even as questions arise about whether the event will return to Chicago next year.

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Emanuel has said the NFL and Choose Chicago were responsible for covering the cost of any city services and that there would be no cost to taxpayers. The city has said it would invoice Choose Chicago for city services used but those figures have not been released yet.

The Park District declined to make CEO Michael Kelly available for an interview. A spokeswoman said in a statement that the agency entered into a special agreement with the draft's organizers and that the NFL didn't pay fees because the event was free and provided a public benefit.

"The Chicago Park District has a long history and tradition of hosting amazing events within our beautiful parks for all to enjoy. For private events like Lollapalooza, in which attendees must purchase tickets, event organizers must pay to use park space. In certain circumstances, organizers of events that are open to the public enter into a partnership agreement with the Park District. In these partnerships, the event organizers do not have to pay a park rental fee because the event is determined to offer a public benefit."

The spokeswoman said the agency has struck similar partnerships with organizers of Taste of Chicago, Blues Fest, the Air and Water Show, the Bud Billiken Parade and the Puerto Rican festival.

Two of those events — the Bud Billiken Parade and the Puerto Rican Festival — are hosted by a nonprofit organization. The rest are run by the city.

The Puerto Rican Festival, now held at Humboldt Park, has been managed the last two years by Special Events Management, whose founder and CEO Hank Zemola said the approximately $180,000 rental fee was waived because of the cultural benefit the free events provides.

Zemola praised the district treatment of fee waiving, citing how the rest of the 50 events his company manages pay the fees.

"For most people, the Park (District) is very good about people paying," he said.

Choose Chicago was helped in the permitting process by C3 Presents, the Austin, Texas-based promotional company that stages Lollapalooza. The NFL's permit requested Grant Park and nearby areas for 22 days, with three sites each renting for about $312,500.

Choose Chicago officials declined to answer questions related to the rental fee waiver. Instead, a spokeswoman issued a statement that said, "As we have shared … many times, no taxpayer money was used to host the 2015 NFL Draft."

Still, the new documents appear to satisfy at least one of the many requests from a five-page wish list of demands for free services that the NFL sent to Choose Chicago last year when mulling where to relocate its draft from New York's Radio City Music Hall. The demands included cordoning off stretches of road around Grant Park and Congress Plaza for nearly three weeks without charge.

Officials have previously said they honored so-called basic requests such as covering the cost for the NFL to rent the Auditorium Theatre, which is owned by Roosevelt University. Choose Chicago CEO Don Welsh said sponsors and donations will cover the cost, estimating that Choose Chicago needs to raise about $3 million to $4 million. Welsh was not made available for comment.

NFL spokesman Brian McCarthy said Wednesday that the league spent "millions" on the draft, including the tents and exhibits in a 900,000-square-foot area known as Draft Town.

"We also hosted free football clinics for more than 1,500 area schoolchildren in the park," McCarthy said. "ESPN and NFL Network went live for the week of the draft from sets on site inside the theater and also out in the park. Our hotel needs alone in Chicago were 1,000 rooms for draft week."

City officials have said the draft was a boon for the city's economy, a claim that economists have said is misleading because events such as the draft draw dollars that would otherwise be spent elsewhere locally.